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Bernard Arnault’s Leadership Essay

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Updated: Dec 12th, 2019

Introduction

Many are the times that people pose to evaluate others whom they consider as leaders. A major mistake that they (people) all make is to associate leadership with public visibility and greatness. This perception inhibits one’s capacity to develop and nurture leadership skills (Ogbonna & Harris 2000).

If only people could change their perception about leadership, they could be able to identify their leadership talents and therefore work towards improving them. Daft posits, “Leadership comes in all shapes and sizes, and many true leaders are working behind the scenes. Leadership that has big outcomes often starts small” (2011, p. 6). This paper will focus on the leadership of Bernard Arnault.

Arnault as a Leader

Bernard Arnault is considered a leader because of his success in LVMH Company. The company deals with fashion products, which makes it one of the toughest businesses to operate. Despite the numerous changes that keep on arising in the fashion industry, Bernard is able to keep pace with the changes (Givhan 2002).

Fashion business requires a leader who is able to identify what to modify or drop to enhance its performance. Arnault is one such leader who accentuates success in LVMH. Under Arnault’s enormous merchandise dexterities, LVMH has managed to rise into one of the biggest companies in the manufacture and sale of cosmetics, jewellery, and perfumes.

Through his leadership, brands like Fendi, Vuitton, and Christian Dior gained popularity thus becoming the most preferred perfumes. By comparing Arnault’s background and his success in LVMH, one would not doubt that he is one the leaders that are rare to find. After graduating with an engineering degree, he assisted his father in a construction company (Givhan 2002).

He always wished to trade in luxury products, a dream that led to him purchasing Boussac. Later, he sold Boussac and purchased part of LVMH. In spite of having limited knowledge in fashion industry, Arnault had leadership traits, which helped him gain control of the company gradually. His ability to manage a business and creativity are some of the factors that make him a great leader.

Strengths and weaknesses

Situational theories of leadership suppose, “Leaders choose the best course of action based upon situational variables” (Vecchio 1987, p. 445). Prior to making any decision, leaders evaluate the situation to determine the appropriate course to take. The same happens with Arnault. One of the Arnault’s strengths is his ability to evaluate business environment and change his operation style to cope with the prevailing situation.

For instance, Arnault started with purchasing majority of the luxury brands, which helped him grow his financial base, as well as, expand his business. However, economic changes in the early 21st century led to many people ceasing to use many luxury goods. To make sure that LVMH continues to do well in the market, Barnard embarked on a quality improvement strategy. His ability to maintain the brand quality is what has helped the company remain competitive across the globe.

One of Arnault’s weaknesses is his ambition to establish a business conglomerate that encompasses all luxury products. On one side, the ambition might be of significant benefit since it helps to reinforce the financial base of the business. The problem arises when it comes to managing all the brands.

Despite Arnault having leadership skills, he is unable to manage many brands leading to some of his brands encountering financial challenges (McKee, Kemp & Spence 2013). In the early 2000, Barnard was forced to scale back some of his brands because he could not sustain them. Arnault’s inability to manage many brands is what made him focus on a few brands.

Arnault as an Effective Leader

An effective leader is one that is able to identify opportunities and capitalize on them (Druskat & Wheeler 2003). Arnault is a visionary leader who has helped LVMH to achieve its current growth. Since Barnard assumed leadership of LVMH, the company has relentlessly worked on improving the quality of its products.

One of Arnault’s leadership styles entails identifying brands that are preferred in the market and working on enhancing the quality of these brands. Upon analysing how Arnault makes decisions to purchase a particular brand, one learns that he focuses on renowned brands. The recent intention to purchase Hermes depicts Arnault’s ambition to dominate the fashion industry. Currently, LVMH’s brands are very competitive in the market.

Under Arnault’s leadership, LVMH continues introducing novel fashions and styles in the fashion industry (Druskat & Wheeler 2003). Currently, Arnault’s leadership is witnessed in at least 60 brands across the globe. Fashion brands such as Christian Dior, Donna Karan, and Fendi are major testimonies of Arnault’s personal leadership.

His emphasis on quality made these products popular in the market. In spite of Christian Dior being in the market for a long time, the brand is still popular. Many customers prefer it to other rival brands. Arnault’s leadership has helped LVMH attain its current glory in the fashion industry.

Despite Arnault helping LVMH dominate the fashion industry, he has a number of shortcomings in his management style. He is an aggressive leader who settles for nothing short of the best. This trait underlines the reason why he purchased numerous brands during his early years in LVMH. One of the major limitations of Arnault’s leadership style is that it generates unhealthy competition in the industry making it hard for majority of the infant industries to grow.

He uses this style to incapacitate the young companies, therefore, getting a chance to purchase them. In the process, he ensures that he cuts down competition levels in the market. A good management style is the one that is open and transparent. Nevertheless, Arnault’s management style shows a level of dishonesty (Wetlaufer 2001).

After learning that Hermes was doing well in the market, he sought to collaborate with the company in the production of some of the fashion products. What the management in Hermes’ Company did not know is that Arnault aimed at purchasing Hermes’ stock gradually, therefore, gaining control of the company (Thomas 2011).

Eventually, he would assume leadership of the company thus managing all its operations. In a way, Arnault harboured an ulterior motive when he decided to invest in Hermes. He did not care about the company’s leadership as well as clients. All he wanted was to gain control of the company and or divert all its income to himself.

Conclusion

Bernard Arnault is a visionary leader who has helped LVMH to attain its current success in the fashion industry. Desire to dominate the fashion industry led to Arnault buying numerous fashion companies immediately after he became the leader of LVMH. Under his leadership, the company has improved the quality of majority of its brands making them outstanding in the market.

Nevertheless, his leadership has had several limitations. For instance, in his effort to expand his conglomerate, Arnault ends up harming the young companies thus making it hard for them to grow. In other words, his management style discourages competition, which is of great value to customers.

References

Daft, R 2011, The Leadership Experience, United States, Thomson.

Druskat, V & Wheeler, J 2003, ‘Managing from the boundary: the effective leadership of self-managing work teams’, The Academy of Management Journal, vol. 46 no. 4, pp. 435-457.

Givhan, R 2002, ‘The French Connection: Bernard Arnault Built a Fashion Empire, but Don’t Expect Any Air Kisses’, Washington Post, vol. 1 no. 1, pp. 13-19.

McKee, A, Kemp, T, & Spence, G 2013, Management: A Focus on Leaders, Pearson Education, Australia.

Ogbonna, E & Harris, C 2000, ‘Leadership style, organizational culture and performance: empirical evidence from UK companies’, The International Journal of Human Resource Management, vol. 11 no. 4, pp. 766-788.

Thomas, D, 2011, The Battle for Hermes,

Vecchio, R 1987, ‘Situational Leadership Theory: An examination of a perspective theory’, Journal of Applied Psychology, vol. 72 no. 3, pp. 444-451.

Wetlaufer, S 2001, ‘The Perfect Paradox of Star Brands: An Interview with Bernard Arnault of LVMH’, Harvard Business Review, vol. 1 no. 1, p. 116.

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